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Full text of "Comparison of tax burdens and rates on a single person, a head of household, and a married couple"

1953 ^'H^ 

Summary of the President's 1954 
Budget 

Summary of the Budget of the National 
Government of Canada for the Fiscal 
Year Ending March 31, 1954 

Preliminary Digest of Suggestions 
for Internal Revenue Revision 
Submitted to the Joint Committee 
on Internal Revenue Taxation 

Federal Excise-Tax and Collection Data 

Estimates of Federal Receipts for 
Fiscal Years 1953 and 1954 

Digest of Testimony Presented Before 
the Ways and Means Committee Relative 
to the President's Recommendations 
to Extend for Six Months the Excess- 
Profits Tax 

Excess Profits Tax 

Excise Tax on Admissions 

Examples Illustrating the Application 
of Section 206 of H. R, 6426 

Hearing - Reorganisation of the Bureau 
of Internal Revenue- September 25, 1953 



1954 

Summary of the President's 1955 Budget 

Summary of Committee on Finance Hearings 
on H. R. 8224, a Bill to Reduce Excise 
Taxes, and for Other Purposes 

Present Law Individual Income, Estate 
Gift, and Excise Tax Rates 



Historical Data Pertaining to the 
Individual Income Tax 1913-54 

Comparison of Tax Burdens and Rates 

on a Single Person, a Head of Household, 

and a Married Couple 



1955 

The Internal Revenue Service - Its 
Reorganization and Administration 

Federal Excise-Tax Data 

Summary of the President's 1956 Budget 

Data on Sections 462 and 452 of the 
Internal Revenue Code of 1954 

Renegotiation Act of 1951 as Amended 
Through August 3, 1955 

Cross-Ref erence Within the Internal 
Revenue Code of 1954 as of January 1, 
1956 

Alternative Plans for Reducing the 
Individual Income Tax Burden 

1956 

Report to the Subcommittee on Excise 
Tax Technical and Administrative 
Problems 

Data on Minor Tax Bills Pending Before 
the Committee on Finance on January 6, 
1956 

Report of the Joint Committee on 
Internal Revenue Taxation Relating to 
Renegotiation 



Terminology of the Internal Revenue 
Code of 1954 

Application of the Tax on Transportation 
of Persons to Foreign Travel Under 
Present Law, H. R. 5265, as Passed by 
the House of Representatives, and 
H. R. 5265, as Passed by the Senate 

Estimates of Federal Receipts for 
Fiscal Years 1956 and 1957 

Summary of the Senate Amendments to 
Title II of H, R. 10660, the Highway 
Revenue Act of 1956 

Data on Title II of H. R. 10660, the 
Highway Revenue Act of 1956 

Renegotiation Act of 1951 Amended 



COMPARISON OF TAX BURDENS AND 

RATES ON A SINGLE PERSON, 

A HEAD OF HOUSEHOLD, 

AND A MARRIED COUPLE 



PREPARED BY THE 

STAFF OF THE JOINT COMMITTEE ON 
INTERNAL REVENUE TAXATION 

DECEMBER 1954 




UNITED STATES 
GOVERNMENT PRINTmG OFFICE 
54800 WASHINGTON : 1954 



COMPARISON OF TAX BURDENS AND RATES ON A SINGLE 
PERSON, A HEAD OF HOUSEHOLD, AND A MARRIED 
COUPLE 



Table 1. — Comparison between the present law rates of tax on a single person, with 
1 that of a head of household and a married couple by taxable income classes ' 

, [Rates of tax— percent] 



Taxable Income class ' 
(thousands) 



Single person 



Head of 
household 



Excess in tax- 
able income 
class of single 
person's rate 
over head of 
household's 
rate 



Married 

couple, joint 

return 



Excess hi tax- 
able income 
class of single 
person's rate 
over married 
couple's rate 



Oto $2 

12 to $4__. 

;$4tO$6-_. 

!$6 to $8__. 
|$8 to $10„ 
'$10 to $12_ 
$12 to $14_ 
$14 to $16. 
'$16 to $18- 
$18 to $20. 
$20 to $22. 
j$22 to $24. 



'$24 to $26 

$26 to $28 

!$28to $32 

$32 to $36 

$36 to $38 

$38 to $40 

$40 to $44 

$44 to $50 

;$50to $52 

i$52 to $60 

$60 to $64 

$64 to $70 

$70 to $76 

$76 to $80 

$80 to $88 

;$88 to $90 

$90 to $100___ 
$100 to $120__ 
$120 to $140.. 
$140 to $150.. 
$150 to $160.. 
$160 to $180.. 
$180 to $200.. 
$200 to $300- 
$300 to $400.. 
i$400 and over. 



20 
22 

26 
30 
34 

38 
43 
47 
50 
53 
56 
59 
59 
62 
62 
65 
65 
69 
69 
72 
75 
75 
78 
78 
81 
81 
84 
84 
87 
89 
89 
89 
90 
90 
90 
91 
91 
91 



20 

21 

24 

26 

30 

32 

36 

39 

42 

43 

47 

49 

52 

52 

54 

58 

58 

62 

62 

66 

68 

68 

71 

71 

74 

74 

76 

76 

80 

83 

83 

83 

87 

87 

87 

90 

91 

91 



10 

9 

10 

7 
10 

8 

7 
7 
7 
7 
6 
7 
7 
7 
7 
7 
7 



20 

20 

22 

22 

26 

26 

30 

30 

34 

34 

38 

38 

43 

43 

47 

50 

53 

53 

56 

59 

59 

62 

62 

65 

65 

69 

69 

72 

72 

75 

78 

81 

81 

84 

87 

89 

90 

91 



I • Income after all deductions and exemptions: 



2 COMPARISON OF TAX BURDENS AND RATES 

Table 2. — Comparison of the difference in the present law tax of a single person wit, 
that of a head of household and a married couple in each taxable income class am 
the cumulative difference at the top of each taxable income class ' !. 



Taxable income class ' 
(thousands) 



Excess of single person's tax — 



Over head of 

household in 

taxable iacome 

class 



Over head of 
household cumu- 
lated to top of 
taxable income 
class 



Over married 

couple in taxable 

income class 



Over married 
couple cumulate ' 
to top of taxabl^ 

income class 



to $2 

$2 to $4 

$4 to $6 

$6 to $8 

$8 to $10 

$10 to $12 

$12 to $14 

$14 to $16 

$16 to $18 

$18 to $20 

$20 to $22 

$22 to $24 

$24 to $26 

$26 to $28___. 

$28 to $32 

$32 to $36 

$36 to $38 

$38 to $40 

$40 to $44 

$44 to $50 

$50 to $52 

$52 to $60 

$60 to $64 

$64 to $70 

$70 to $76 

$76 to $80 

$80 to $88 

$88 to $90 

$90 to $100__. 
$100 to $120_. 
$120 to $140,. 
$140 to $150.. 
$150 to $160.. 
$160 to $180.- 
$180 to $200.. 
$200 to $300.. 
$300 to $400. . 
$400 and over. 




$20 
40 
80 
80 
120 
140 
160 
160 
200 
180 
200 
140. 
200 
320 
280 
140 
140 
280 
360 
140 
560 
280 
420 
420 
280 
640 
160 
700 
1,200 
1,200 
600 
300 
600 
600 
1,000 





$20 
60 
140 
220 
340 
480 
640 
800 
000 
180 
380 
520 
720 
040 
320 
460 
600 
880 
240 
380 
940 
220 
640 
060 
340 
980 
140 
840 
040 
240 
840 
140 
740 
340 
340 
340 
340 





$40 

80 

160 

160 

240 

260 

340 

320 

380 

360 

420 

320 

380 

600 

600 

240 

320 

520 

780 

320 

1,040 

640 

780 

960 

480 

1,200 

240 

1,500 

2,800 

2,200 

800 

900 

1,200 

600 

2,000 

1,000 



1 Income after all deductions and exemptions) 



I COMPARISON OF TAX BURDENS AND RATES S 

Table 3 compares the tax liability under present law of a married 
couple with no dependents with that of a head of household with one 
dependent. This table shows the benefits of full income splitting 
received by a married couple as compared with the tax of a head of 
household who receives approximately one-half the full income sphtting 
benefits. 

Table 3. — Comparison of the present law tax liability of a married couple with no 
dependents and head of household with 1 dependent 



Net income (mcome after deductions 
but before exemptions) 



Tax liability 



Married couple, 
no dependents 



Head of house- 
hold, 1 depend- 
ent 



Difference in tax of mar- 
ried couple compared 
with head of household 



Amount 



Percent 



$5,000__ 
$10,000- 
$25,000. 
$50,000- 
$100,000 
$500,000 



$760 

1,888 

6,724 

19, 592 

52, 776 

403, 548 



$778 

2,060 

8,082 

22, 788 

59, 520 

416, 388 



$18 

172 

1,358 

3, 196 

6, 744 

12, 840 



2.3 
8.3 

16. 8 

14.0 

11.3 

3. 1 



54800—54- 



4 COMPARISON OF TAX BURDENS AND RATES 

Table 4 compares the individual income-tax liability between a. 
single person and a married couple for the years 1944-45 with thatj 
under present law. I 

This table illustrates the change in the relative burden of a singlej, 
person as compared with that of a married couple. For example, in| 
1944-45 a single person with a net income of $10,000 paid $2,755 in 
tax, a married couple $2,585, or $170 less than the single person] 
this difference was due to exemptions. Under present law thi^^ 
difference amounts to $548; this difference is due to exemptions and] 
split income. As shown in the table, the relative difference in thei 
percent of net income taken in tax between the single person and ai 
married couple is greater under present law than in the period 1944-45 
for all classes shown. 

I 
Table 4. — Comparison between the individual income-tax liabilities of a single per-\ 

son with no dependents and a married couple ' with no dependents for the years^ 

1944.-45 with that under present law t 



Marital status 


Net income 

(income after 

deductions 

but before 

exemptions) 


Tax liability 


Percent of net income ! ' 
taken in tax 'i 




1944-45 


Present law 


1944-45 


Present law 


Single _ - - 


$2, 000 
2,000 


$345 
245 


$280 
160 


17.3 
12.3 


14. (] 

•8.d 


Married couple 




Excess, single over 
married 




100 


120 


5.0 


1 

6.(j| 






-Single - 


3,000 
3,000 


585 
475 


488 
360 


19.5 
15.8 


16.^ 
. 12. (i 

i 


Married couple 




Excess, single over 
married 




110 


128 


3. 7 


1 
1 
1 

4. 1 








Single 


5,000 
5,000 


1, 105 

975 


944 
760 


22. 1 

19.5 


18. { 


Married couple 


15.3 




Excess, single over 
married 




130 


184 


2.6 


Q A 
0. (|- 






f 


Single 


10, 000 
10, 000 


2, 755 
2,585 


2, 43« 

1,888 


27. 6 
25.9 


24.^ 
18. t_ 


Married couple 




Excess, single over 
married 




170 


548 


1. 7 


i 






f 



See footnotes at end of table, p. 5. 



COMPARISON OF TAX BURDENS AND RATES 



Table 4. — Comparison between the individual income-tax liabilities of a single per- 
I sow with no dependents and a married couple ^ with no dependents for the years 
\ 1944-45 with that under present law — Continued 



Marital status 


Net income 

(income after 

deductions 

but before 

exemptions) 


Tax liability 


Percent of net income 
taken in tax 


1944-45 


Present law 


1944-45 


Present law 


Single 


$15, 000 
15, 000 


$4, 930 
4,695 


$4, 448 
3,260 


32.9 
31. 3 


29. 7 


Alarried couple 


21.7 


Excess, single over 
married- 






235 


1, 188 


1.6 


8.0 


Single 






20, 000 
20, 000 


7,580 
7,315 


6,942 
4,872 


37.9 
36.6 


34.7 


Married couple 


24.4 


Excess, single over 
married _ _ _ 






265 


2,070 


1.3 


10.3 


Single 






25, 000 
25, 000 


10, 590 
10, 295 


9,796 
6,724 


42.4 
41. 2 


39.2 


Married couple 


26.9 


Excess, single over 
married 






295 


3,072 


1.2 


12.3 


Single _ _ .- 






50, 000 
50, 000 


27, 945 
27, 585 


26, 388 
19, 592 


55. 9 
55. 2 


52.8 


Married couple 


39.2 


Excess, single over 
married 






360 


6,796 


.7 


13.6 


Single 






100, 000 
100, 000 


69, 870 
69, 435 


66, 798 
52, 776 


69.9 
69.4 


66.8 


Married couple 


52.8 






Excess, single over 
married 




435 


14, 022 


. 5 


14.0 


Single 






500, 000 
500, 000 


444, 350 
443, 895 


429, 274 
403, 548 


88.9 
88.8 


85.9 


Married couple 


80. 7 


Excess, single over 
married 






455 


25, 726 


. 1 


5.2 


Single 






1, 000, 000 
1, 000, 000 


2 900, 000 
2 900, 000 


3 869, 478 
858, 548 


290.0 
290.0 


3 86. 9 


Married couple 


85.9 


Excess, single over 
married 








10, 930 




1.0 










1 Income earned by 1 spouse. 

2 Maximum effective rate limita 

3 Maxmum effective rate limita 


tion of 90 percei 
tion of 87 percen 


It on net income 
t on taxable inc 


ome. 







6 



COMPARISON OF TAX BURDENS AND RATES 



Table 5 compares the individual income-tax liability between a 
head of a household and a married couple for the years 1944-45 with 
that under present law. In 1944-45 a married couple or a head o:^ 
a household paid the same tax. Under the present law the head of aj 



household pays more than a married couple except where the taxabld 
income is not over $2,000. 

Table 5. — Comparison between the individual income-tax liabilities of a head oJ\ 
a household with 1 dependent and a married couple i with no dependents for the 
years 194-4--45 with that under present law ] 


Marital status 


Net income 
(income after 
deductions 
but before 
exemptions) 


Tax liability 


f 

Percent of net income 
taken in tax 




1944-45 


Present law 


1944-45 


Present law| 


Head of household 

Married couple 


$3, 000 
3,000 


$475 
475 


$360 
360 


15. 8 

15. 8 


12. Oi 

12. 4| 




Excess, head of 
household over 
married couples. 




















1 


Head of household 

Married couple 


5,000 
5,000 


975 
975 


778 
760 


19. 5 
19. 5 


1 

15. G,! 
15. 4i 


Excess, head of 
household over 
married couple 






18 




i 
.4 








Head of household 

Married couple 


10, 000 
10, 000 


2,585 
2,585 


2.060 

1.888 


25.9 
25.9 


20. q. 
18.^ 




i" 


Excess, head of 
household over 
married couple 






172 




1.7 








Head of household 

Married couple 


15, 000 
15, 000 


4,695 
4,695 


3.708 
3.260 


31.3 
31.3 


24.7 
21. 7t 


Excess, head of 
household over 
married couple 






448 




3. Oi 








Head of household 

Married couple 


20, 000 
20, 000 


7,315 

7,315 


5,744 
4,872 


36.6 
36. 6 


28.7^ 
24.4 


Excess, head of 
household over 
married couple. _ 






872 




4. 3| 

1. 








See footnotes at end of table, p. 1 













1 COMPARISON OF TAX BURDENS AND RATES 7 

JTable 5. — Comparison between the individual income-tax liabilities of a head of 
■ a household with 1 dependent and a married couple i with no dependents for the 
years 1944~45 with that under present law — Continued 

f 


1 Marital status 


Net income 
(income after 
deductions 
but before 
exemptions) 


TaxliabOity 


Percent of net income 
taken in tax 


1944-45 


Present law 


1944-45 


Present law 


i 

Head of household 

kMarried couple 


$25, 000 
25, 000 


$10, 295 
10, 295 


$8, 082 
6,724 


41. 2 
41. 2 


32.3 
26. 9 






Excess, head of 
household over 
married couple 






1,358 




5. 4 










Head of household 

Married couple 


50, 000 
50, 000 


27, 585 
27, 585 


22, 788 
19, 592 


55.2 
55.2 


45.6 
39.2 


Excess, head of 
household over 
married couple 






3, 196 




6. 4 










Head of household 

Married couple 


100, 000 
100, 000 


69, 435 
69, 435 


59, 520 

52, 776 


69.4 
69. 4 


59.5 
52.8 


Excess, head of 
household over 
married couple. 






6,744 




6. 7 










Head of household 

Married couple 


500, 000 
500, 000 


443, 895 
443, 895 


416, 388 
403, 548 


88. 8 
88. 8 


83. 3 

80. 7 


Excess, head of 
household over 
married couple 






12, 840 




2. 6 










Head of household 

Married couple _ 


1, 000, 000 
1, 000, 000 


2 900, 000 
2 900, 000 


3 868, 956 
858, 548 


2 90.0 
2 90.0 


3 86.9 
85. 9 






Excess, head of 
household over 
married couple 






10, 408 




1. 











1 Income earned by 1 spouse. 

2 Maximum effective rate limitation of 90 percent on net income. 

• Maximum effective rate limitation of 87 percent on taxable income. 



COMPARISON OF TAX BURDENS AND RATES 



Table 6. — Comparison of the present law marginal rates of tax on individuals in 
Canada and the United States I 



Taxable income (thousands) 



Canadian rate i 



United States rate for — 



Single person 



Head of house- 
hold 



Percent 



Percent 



Percent 



to $1 

$1 to $2 

$2 to $4 

$4 to $6 

$6 to $8 

$8 to $10 

$10 to $12__- 
$12 to $14__. 
$14 to $15. _- 
$15 to $16., _ 
$16 to $18-. _ 
$18 to $20... 
$20 to $22... 
$22 to $24. __ 
$24 to $25. __ 
$25 to $26. -_ 
$26 to $28... 
$28 to $32... 
$32 to $36_-. 
$36 to $38.. _ 
$38 to $40_._ 
$40 to $44... 
$44 to $50... 
$50 to $52... 
$52 to $60... 
$60 to $64... 
$64 to $70. -_ 
$70 to $76... 
$76 to $80. -. 
$80 to $88_._ 
$88 to $90_._ 
$90 to $100- _ 
$100 to $120- 
$120 to $125- 
$125 to $140. 
$140 to $150. 
$150 to $160. 
$160 to $180. 
$180 to $200. 
$200 to $225. 
$225 to $300- 
$300 to $400. 
$400 and over 



15 
17 
19 
22 
26 
30 
35 
40 
40 
45 
45 
45 
45 
45 
45 
50 
50 
50 
50 
50 
50 
55 
55 
55 
55 
60 
60 
60 
60 
60 
60 
65 
65 
65 
70 
70 
70 
70 
70 
70 
75 
75 
80 



20 
20 
22 
26 
30 
34 
38 
43 
47 
47 
50 
53 
56 
59 
59 
59 
62 
62 
65 
65 
69 
69 
72 
75 
75 
78 
78 
81 
81 
84 
84 
87 
89 
89 
89 
89 
90 
90 
90 
91 
91 
91 
91 



20 
20 
21 
24 
26 
30 
32 
36 
39 
39 
42 
43 
47 
49 
52 
52 
52 
54 
58 
58 
62 
62 
66 
68 
68 
71 
71 
74 
74 
76 
76 
80 
83 
83 
83 
83 
87 
87 
87 
90 
90 
91 
91 



' Does not include the 2-percent old-age security tax on the 1st $3,000 of income which is considered part i 
the Canadian income tax. 



COMPARISON OF TAX BURDENS AND RATES 9 

^ABLE 7, — Comparison of the present law individual income-tax burdens in Canada 

and the United States 



t 

F 

[ 

jicome after dedue- 
' tions but before 
1 personal exemp- 
tions 1 

1 


Canada 2 


United States 


Single 
person, no 
dependents 


Married 
couple, no 
dependents 


Difference in 
amount of tax 
of single 
person over 
that of mar- 
ried couple 


Single person, 
no dependents 


Married 
couple, no 
dependents 


Difference in 
amount of tax 
of single 
person over 
that of mar- 
ried couple 


$1,000 








$80 

280 

488 

708 

944 

1,780 

2,436 

4,448 

6,942 

9,796 

26, 388 

66, 798 

429, 274 

3 869, 478 


$160 

360 

560 

760 

1,416 

1,888 

3,260 

4,872 

6,724 

19, 592 

52, 776 

403, 548 

858, 548 


$80 


$2,000. __ 


$170 

360 

570 

760 

1,460 

2,020 

3,820 

6,020 

8,270 

21, 874 

53, 774 

367, 124 

787, 124 


$170 

360 

570 

1,200 

1,720 

3,420 

5,570 

7,820 

21, 324 

53, 124 

366, 324 

786, 324 


$170 
190 
210 
190 
260 
300 
400 
450 
450 
550 
650 
800 
800 


120 


^3,000 - 


128 


$4,000- - _ 


148 


$5,000 


184 


$8,000 • - 


364 


$10,000 

$15,000 

$20,000 

$25,000 

$50,000 

$100,000 

$500,000 

$1,000,000 


548 

1, 188 

2,070 

3,072 

6,796 

14, 022 

25, 726 

10, 930 



1 Assumes all income up to $30,000 is earned income and all income over $30,000 is investment income other 
than dividend income. 

2 Includes the 2-percent old-age security tax on the 1st $3,000 of income. 

3 Takes into account the maximum effective rate limitation of 87 percent of taxable income. 



o